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(Bloomberg) — Italy registered an increase in power prices last month, the first year-on-year gain since 2022 and a departure from the Europewide trend.

The nation’s average day-ahead price eked out a 0.6% gain from a year earlier, compared with declines of 13% in Germany and 39% in France. That reflects high air-conditioning needs amid a heat wave, with utilities forced to rely on costly gas-power to meet demand while other countries tapped booming renewables.

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“The Italian power market is highly correlated to gas and has little flexibility to draw on other sources of supply when demand surges,” said Florence Schmit, an energy strategist at Rabobank. “This is why you see Italian power prices rise.” 

The country’s reliance on gas puts it at greater risk of energy shocks since most of Europe has more solar and wind power to keep the lights on. That may be set to change, with Italy gradually producing more clean energy, but there’s little sign the price spikes will disappear just yet.

Italian power demand averaged a record 42 gigawatts in July, up 4% from a year earlier, according to a Bloomberg analysis of data from Terna SpA. That pushed up gas consumption, while use of the fuel remained flat in Germany, where renewables were able to meet jumps in demand, according to Rabobank.

Italy’s day-ahead power price averaged €113 a megawatt-hour in July, about double the equivalent contract in other major European markets such as France and Germany.

—With assistance from Lars Paulsson.

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